SB1,1,101An Actto create 20.435 (4) (bv), 20.435 (4) (j), 20.435 (4) (jb), 20.435 (4) (jd), 249.477 and 49.688 of the statutes; relating to: requiring pharmacies and 3pharmacists, as a condition of medical assistance participation, to charge 4elderly persons for prescription drugs no more than specific amounts; 5specifying requirements for rebate agreements between the department of 6health and family services and drug manufacturers; requiring the department 7of health and family services to seek a waiver to provide medical assistance 8eligibility to certain persons for purposes of a prescription drug benefit; 9requiring the exercise of rule-making authority; making appropriations; and 10providing penalties.

Analysis by the Legislative Reference Bureau

Under current state law, pharmacies and pharmacists that are certified providers of medical assistance (MA) services are reimbursed, at a rate established by the department of health and family services (DHFS), for providing certain prescription drugs to MA recipients. Under current federal law, persons entitled to coverage under part B of medicare do not receive coverage for prescription drugs for outpatient care as a benefit.

This bill provides that, beginning March 1, 2002, persons who have applied for and have been found by DHFS to be eligible for prescription drug assistance and who have paid an annual enrollment fee of $20 may use a card, issued by DHFS, to obtain certain prescription drugs for outpatient care at a rate that is not more than the medical assistance rate plus 5%, plus a pharmacy dispensing fee. After an eligible person has paid a deductible by expending $500 in a 12-month period for prescription drugs at this reduced rate, the person may obtain additional prescription drugs in that period by paying a copayment of $5 for each generic drug and a copayment of $10 for each drug that is not a generic drug. Persons who are eligible to obtain prescription drugs for these reduced charges are state residents who are at least 65 years of age, are not MA recipients, and have household incomes, as determined by DHFS, that do not exceed 300% of the federal poverty line for a family the size of the persons' eligible families. Persons who are otherwise eligible but who have household incomes that do not exceed 175% of the federal poverty line for a family the size of the persons' eligible families may obtain prescription drugs by paying the $5 and $10 copayments without first paying the $500 deductible. Persons who are otherwise eligible but who have household incomes that exceed 300% of the federal poverty line for a family the size of the person's eligible family must first, in a 12-month period, pay for prescription drugs at market rate, a deductible that equals the difference between the person's annual household income and 300% of the federal poverty line; after this is paid, the persons must pay an additional $500 deductible for prescription drugs at the reduced rate; and the persons may then obtain additional prescription drugs in the remaining amount of the 12-month period by paying the generic and nongeneric drug copayments. As a condition of participation by a pharmacy or pharmacist in the MA program, the pharmacy or pharmacist may not charge persons who are eligible for prescription drug assistance more than these amounts; as a part of the costs chargeable for the deductible, the pharmacy or pharmacist may include a dispensing fee, but may not charge a dispensing fee after the deductible is met. If a person who is eligible has other available coverage for prescription drugs, the program does not apply to the costs for prescription drugs available under that other coverage.

Under the bill, DHFS or an entity with which DHFS contracts must provide to drug manufacturers material designed for use in entering into rebate agreements that are modeled on federal medicaid rebate agreements, under which the manufacturer must make payments to the state treasurer for deposit in the general fund for the manufacturer's drugs that are prescribed and purchased under the program. The amount of the rebate payment under the agreement is required to be determined by the method that is specified under the federal medicaid rebate agreements. The amounts of the rebate payments must, in turn, together with general purpose revenues under a sum sufficient appropriation created under the bill, be paid by DHFS to pharmacies or pharmacists that have reduced charges for prescription drugs for the eligible persons. Payment is at the medical assistance rate plus 5%, minus any copayment made, plus a dispensing fee.

Under the bill, DHFS is authorized to enter into a contract with an entity to perform DHFS' duties and exercise its powers, other than rule making, under the prescription drug assistance program. DHFS must, under the bill, promulgate rules that specify the criteria to be used to determine household income for persons eligible for prescription drug assistance. Prescription drugs for which the reduced charges must be made are those that are available as an MA benefit and that are manufactured by a manufacturer that enters into a rebate agreement with DHFS. DHFS must calculate and transmit to pharmacies and pharmacists that participate in the MA program the prices at the medical assistance rate plus 5% that must be charged to certain eligible persons in meeting the deductible for prescription drugs and must periodically update this information and transmit the updated information to pharmacies and pharmacists. DHFS must monitor compliance by pharmacies and pharmacists with the requirement to charge eligible persons for the specified prescription drugs at the reduced amounts and annually report to the legislature concerning the compliance. DHFS also must promulgate rules that establish prohibitions against fraud that are substantially similar to MA fraud provisions; the bill specifies penalties applicable to violations of these prohibitions.

If federal law is changed to provide coverage for outpatient prescription drugs as a benefit under medicare or another program, DHFS must provide a report to the legislature that analyzes the differences between the federal program and the program under the bill and that provides recommendations concerning alignment, if any, of the differences. The bill appropriates $1,000,000 in general purpose revenues in fiscal year 2001-01 to DHFS for administration of the program. Further, the bill appropriates $1,000,000 in general purpose revenues to the joint committee on finance and authorizes DHFS to submit a proposal for review and approval by the department of administration and by the joint committee on finance, for expenditure of these moneys.

Lastly, under the bill, DHFS must request from the secretary of the federal department of health and human services a waiver of federal medicaid laws to permit DHFS to conduct a project to expand MA eligibility for persons who are eligible for and enrolled in Medicare and persons whose annual household incomes do not exceed 300% of the federal poverty line for a family the size of the persons' eligible families. Under the waiver, the expanded MA eligibility entitles an eligible person, after paying a $20 annual enrollment fee, to purchase a prescription drug for a copayment, as specified in the bill, for that prescription drug. The pharmacy or pharmacist who sells the drug at this reduced price receives reimbursement for the difference between the copayment and the medical assistance reimbursement amount from DHFS, from moneys received by DHFS under rebate agreements with drug manufacturers.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB1, s. 11Section
1. 20.435 (4) (bv) of the statutes is created to read:

SB1, s. 24Section
2. 20.435 (4) (j) of the statutes is created to read:

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20.435 (4) (j) Prescription drug assistance for elderly; manufacturer rebates.6All moneys received from rebate payments by manufacturers under s. 49.688 (6), to 7be used for payment to pharmacies and pharmacists under s. 49.688 (7) for 8prescription drug assistance for elderly persons.

SB1, s. 39Section
3. 20.435 (4) (jb) of the statutes is created to read:

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20.435 (4) (jb) Prescription drug assistance for elderly; enrollment fees. All 11moneys received from payment of enrollment fees under s. 49.688 (3), to be used for 12administration of the program under s. 49.688.

SB1, s. 413Section
4. 20.435 (4) (jd) of the statutes is created to read:

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20.435 (4) (jd) Prescription drug assistance project; enrollment fees. All moneys 15received from payment of enrollment fees under s. 49.477 (2), to be used for 16administration of the program under s. 49.477. This paragraph applies only if a 17waiver, under 42 USC 1315 (a), is granted as requested under s. 49.477 (2).

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(a) "Medicare" means coverage under part A or part B of Title XVIII of the 21federal Social Security Act, 42 USC 1395 to 1395y.

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(b) "Poverty line" means the nonfarm federal poverty line for the continental 23United States, as defined by the federal department of labor under 42 USC 9902 (2).

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(c) "Prescription drug" means a prescription drug, as defined in s. 450.01 (20), 25that is included in the drugs specified under s. 49.46 (2) (b) 6. h. and that is 1manufactured by a manufacturer that enters into a rebate agreement in force under 2sub. (4).

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(d) "Prescription order" has the meaning given in s. 450.01 (21).

SB1,5,124(2) The department shall request from the secretary of the federal department 5of health and human servicesa waiver, under 42 USC 1315 (a), of federal medicaid 6laws necessary to permit the department to conduct a project to expand eligibility for 7medical assistance to include individuals who are eligible for and enrolled in 8medicare and individuals whose annual household incomes, as determined by the 9department, do not exceed 300% of the federal poverty line for a family the size of the 10individual's eligible family. Eligibility for medical assistance under this subsection 11entitles an individual, after payment of a $20 annual enrollment fee, only to the 12discounted purchase of prescription drugs as specified under sub. (3).

SB1,5,2013(3) Under the project under sub. (2), as a condition of participation by a 14pharmacy or pharmacist in the program under s. 49.45, 49.46, or 49.47, the 15pharmacy or pharmacist may not charge an individual who is eligible for medical 16assistance under sub. (2), who is not enrolled in the program under s. 49.688, and who 17presents a valid prescription order an amount for a prescription drug under the order 18that exceeds the amount obtained by subtracting the amount under sub. (4) from the 19medical assistance reimbursement amount for the drug, as determined by the 20department.

SB1,6,421(4) From the appropriations under s. 20.435 (4) (b) and (o), the department 22shall pay the pharmacy or pharmacist for a prescription drug purchased as specified 23under sub. (3) an amount that results from applying to the medical assistance 24reimbursement rate amount for the drug the percentage that results from dividing 25the revenue for the prescription drug that the department received the previous year 1under the rebate agreement under 42 USC 1396r-8 with a prescription drug 2manufacturer that sells the prescription drug for prescribed use in this state by the 3total amount of medical assistance expenditures for prescription drugs for the 4previous year, as determined by the department.

SB1,6,95(5) The department may not implement the program under this section unless 6a waiver that is consistent with all of the provisions of this section is granted and in 7effect. If the department receives the waiver, at the end of the period during which 8the waiver remains in effect the department shall request any available extension 9of the waiver.

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(a) "Generic name" has the meaning given in s. 450.12 (1) (b).

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(b) "Poverty line" means the nonfarm federal poverty line for the continental 15United States, as defined by the federal department of labor under 42 USC 9902 (2).

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(c) "Prescription drug" means a prescription drug, as defined in s. 450.01 (20), 17that is included in the drugs specified under s. 49.46 (2) (b) 6. h. and that is 18manufactured by a drug manufacturer that enters into a rebate agreement in force 19under sub. (6).

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(d) "Prescription order" has the meaning given in s. 450.01 (21).

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(b) A person to whom par. (a) 1. to 3. and 5. applies, but whose annual household 8income, as determined by the department, exceeds 300% of the federal poverty line 9for a family the size of the persons' eligible family, is eligible to purchase a 10prescription drug at the amounts specified in sub. (5) (a) 4. only during the remaining 11amount of any 12-month period in which the person has first paid the annual 12deductible specified in sub. (3) (b) 2. a. in purchasing prescription drugs at the retail 13price and has then paid the annual deductible specified in sub. (3) (b) 2. b.

SB1,7,1515
(a) For each 12-month benefit period, a program enrollment fee of $20.

SB1,7,1916
(b) 1. For each 12-month benefit period, for a person specified in sub. (2) (a), 17a deductible for prescription drugs of $500, except that a person whose annual 18household income, as determined by the department, is 175% or less of the federal 19poverty line for a family the size of the person's eligible family pays no deductible.

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2. For each 12-month benefit period, for a person specified in sub. (2) (b), a 21deductible for prescription drugs that equals all of the following:

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a. The difference between the person's annual household income and 300% of 23the federal poverty line for a family the size of the person's eligible family.

SB1,8,21(c) After payment of any applicable deductible under par. (b), all of the 2following:

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1. A copayment of $5 for each prescription drug that bears only a generic name.

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2. A copayment of $10 for each prescription drug that does not bear only a 5generic name.

SB1,8,96
(d) Notwithstanding s. 49.002, if a person who is eligible under this section has 7other available coverage for payment of a prescription drug, this section applies only 8to costs for prescription drugs for the person that are not covered under the person's 9other available coverage.

SB1,8,1510(4) The department shall devise and distribute a form for application for the 11program under sub. (2), shall determine eligibility for each 12-month benefit period 12of applicants and shall issue to eligible persons a prescription drug card for use in 13purchasing prescription drugs, as specified in sub. (5). The department shall 14promulgate rules that specify the criteria to be used to determine household income 15under sub. (2) (a) 4. and (b) and (3) (b) 1.

SB1,8,2016(5) (a) Beginning March 1, 2002, as a condition of participation by a pharmacy 17or pharmacist in the program under s. 49.45, 49.46, or 49.47, the pharmacy or 18pharmacist may not charge a person who presents a valid prescription order and a 19card indicating that he or she meets eligibility requirements under sub. (2) (a) an 20amount for a prescription drug under the order that exceeds the following:

SB1,8,2321
1. For a deductible, as specified in sub. (3) (b) 1. and 2. b., the program payment 22rate, plus a dispensing fee that is equal to the dispensing fee permitted to be charged 23for prescription drugs for which coverage is provided under s. 49.46 (2) (b) 6. h.

SB1,9,312. After any applicable deductible under subd. 1. is charged, the copayment, as 2applicable, that is specified in sub. (3) (c) 1. or 2. No dispensing fee, as specified under 3subd. 1., may be charged to a person under this subdivision.

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3. For a deductible, as specified in sub. (3) (b) 2. a., the retail price.

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4. After the deductible under subd. 3. is charged, the copayment, as applicable, 6that is specified in sub. (3) (c) 1. or 2. No dispensing fee, as specified under subd. 1., 7may be charged to a person under this subdivision.